Track and Trace System Proposed as Solution to Tackle 18% Illicit Cigarette Trade in Pakistan

The share of illicit cigarette trade in Pakistan is recorded around 18 percent which government officials said could be reduced further by ensuring implementation of the track and trace system across the board.

The figure of 18 percent share of illicit cigarettes in the market has been mentioned in the latest reports compiled by independent experts.

According to tax professionals and experts, many independent research studies suggested that multinational companies have been trying to exaggerate the volume of illicit cigarettes in the country to 40 to 42 percent to force the government to withdraw the recent hike in Federal Excise Duty (FED) on cigarettes.

Anti-tobacco activists have advised the government against falling into the trap of such tobacco companies which have been lobbying to see a reduction in taxes on cigarettes in the upcoming federal budget.

These big companies are exaggerating the share of illicit cigarettes in the market to get tax relief from the government. There are around 33 million adult (above 15 years) smokers in Pakistan, one of the highest in the world. Therefore, these two companies have been striving to enhance their sales and profits against the health guidelines of the World Health Organization, they said.

These companies have been pushing the same 40 to 42 percent illicit data in the market for the last many years without any credible source or research study, they maintained.

The three-tier system of FED on cigarettes, proposed by these companies, resulted in the loss of billions of rupees in the past.

The activists said that curbing sales of illicit cigarettes in the market comes under enforcement and should not be handled with tax policy. They urged the government to implement a track and trace system across the board with better border management to discourage the smuggling of cigarettes in Pakistan.

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